Industry ETFs Take the Lead in Issuance, with Multiple Sub-sectors Gaining Popularity

□Our Reporter Zhang Yun

Last week (March 16 to March 20), the ETF issuance market saw new highlights. From product application, initial fundraising, official establishment, to listing and trading, industry-themed ETFs almost dominated the entire ETF product chain.

Power equipment, agriculture, construction machinery, batteries, oil and gas sectors were particularly popular. The scene of eight fund companies rushing to apply for power equipment ETFs was especially eye-catching. ETFs focused on the Hong Kong stock market expanded rapidly, with products emerging in information technology, internet, technology, automotive, biotech, and other sectors. Fund companies showed high enthusiasm for reporting new products, especially during market adjustments, with applications becoming more concentrated. Overall, ETFs—this passive investment tool—are accelerating their extension into industry sector themes.

Industry ETFs Become Mainstream

Last week, one of the most notable features of the ETF issuance market was that industry-themed ETFs almost fully covered all links in the ETF issuance chain, becoming the mainstream category. Whether measured by initial launch date, establishment date, listing date, or application receipt date, new ETFs mainly focused on industry themes.

In terms of coverage areas, the industry ETFs launched last week involved power equipment, batteries, information technology, household appliances, oil and gas, livestock farming, chip design, new energy, software services, securities firms, artificial intelligence, and more. Among ETFs already in the issuance, establishment, or listing stages, oil and gas, batteries, and agriculture were particularly popular.

In the oil and gas sector, the China Securities Oil & Natural Gas Index attracted four fund companies—Ping An, Huaxia, E Fund, and Huaxia—who launched products successively. Ping An launched one ETF on March 16; E Fund and Huaxia ETFs listed and traded on March 19, with trading shares of 209 million and 249 million respectively; Huaxia established one ETF on March 20, raising about 263 million yuan.

In the batteries sector, all fund companies chose the CSI Battery Theme Index. On March 19, Penghua launched one ETF; Dongfang Cai established one ETF, raising 316 million yuan. Huaxia’s ETF listed and traded on March 20, with a total of 615 million shares.

The agriculture sector performed well. GF Securities established a new China Securities Livestock & Poultry Industry ETF on March 18, raising 287 million yuan. Huatai-PineBridge’s product also tracked this index and was listed and traded on March 20, with 426 million shares. On the same day, Invesco Great Wall launched the China Securities Full Index Agriculture, Livestock, and Fishery ETF, with 781 million shares traded.

Meanwhile, strategy ETFs focusing on dividends, free cash flow, and other factors also gained attention, with substantial fundraising. Southern China Securities Full Index Dividend Quality ETF and Great Wall Guosen Free Cash Flow ETF were listed and traded successively, each with over 400 million shares. Invesco Great Wall launched the S&P China A-Share Dividend 100 ETF. Orient Red Asset Management, making its first entry into ETFs, also applied for a low-volatility dividend ETF as its first product.

Hong Kong Stock ETFs Make Frequent Appearances

Along with the rising expectations for valuation recovery in Hong Kong stocks and the continuous improvement of the connectivity mechanism, last week saw a concentrated emergence of Hong Kong stock-themed ETFs. Many fund companies focused on Hong Kong stocks, with ETF products covering information technology, internet, technology, automotive, biotech, and other sectors, becoming a highlight in cross-border ETF categories. The information technology and internet sectors attracted many institutional investors.

The CSI Hong Kong Stock Connect Information Technology Composite Index was favored by three leading institutions. GF Securities and Huaxia launched corresponding ETF products, both starting their initial offerings on March 16. GF’s product was fully raised by March 20. Huatai-PineBridge also filed an ETF application, which was received on March 17.

Similarly, three institutions invested in internet sector ETFs, with relatively quick deployment. Industrial Bank and ICBC Credit Suisse’s CSI Hong Kong Stock Connect Internet Index ETFs were established last week. Industrial Bank’s ETF was established on March 19, raising nearly 300 million yuan; ICBC Credit Suisse’s ETF was established on March 18, raising 245 million yuan. E Fund’s Hong Kong Stock Connect Internet Index ETF was listed on March 19, with 338 million shares traded.

Additionally, E Fund’s CSI Hong Kong Stock Connect Technology ETF and Southern China Securities Hong Kong Stock Connect Automotive Industry ETF were established on March 18, raising 224 million yuan and 217 million yuan respectively; Huatai-PineBridge’s Hang Seng Biotech ETF was listed on March 18, with 275 million shares traded.

Market Adjustments Do Not Diminish Application Enthusiasm

Despite significant market corrections last week, with limited fundraising for newly established funds, fund companies remained highly enthusiastic about ETF deployment, with new product applications accelerating against the trend. A total of 26 ETF applications were received throughout the week, with a concentrated focus on certain sectors.

The application pace showed that market adjustments actually became a peak period for applications. On March 19, the Shanghai Composite Index briefly fell below 4,000 points, closing down 1.39%. On that day, seven ETF applications were received; on March 20, the index further declined, closing down 1.24% and falling below 3,960 points, with eleven ETF applications received. In just two trading days, ETF applications accounted for nearly 70% of the total weekly applications.

In terms of application structure, industry-specific sectors were the main focus. Power equipment led, with eight products applying in the same week, making it the most concentrated area of deployment. Eight fund companies applied for the Hang Seng A-Share Power Grid Equipment Index, with Ping An and GF Securities submitting applications on March 19; ICBC Credit Suisse, Penghua, Southern, Huabao, Huatai-PineBridge, and Bosera followed on March 20. Huaxia also applied for the China Securities Full Index Power Utility ETF on March 20, indicating a comprehensive warming of the power industry chain.

Other sectors such as construction machinery, grain industry, software services, securities firms, and artificial intelligence also saw applications.

招商证券, Huabao, Huatai-PineBridge, and Southern China Securities applied for the China Securities Construction Machinery Thematic Index; the first two received applications on March 20, Huatai-PineBridge on March 19, and Southern on March 16.

E Fund, Taikang, and Bosera focused on the China Securities Grain Industry Index; Tianhong and Penghua increased their positions in the China Securities Software Services Index; Dacheng focused on the China Securities Full Index of Securities Companies; Bank of China Securities entered the AI and Sci-Tech Innovation sectors.

Industry insiders said that the broad-based ETF market is currently quite saturated, and innovation and differentiation may be more challenging. New entrants may find it difficult to break through, while industry-specific, cross-border, and strategy innovation ETFs still have room for development. This could become a new focus of future ETF market competition. As niche sectors continue to be explored and industry logic deepens, ETFs—being accessible and professional asset allocation tools—are expected to offer investors more diverse and precise investment options.